Title : Financial Literacy
Authors : Smriti Ahuja (021330024578) , Dhani Awasthi(021330824010), Sanjhi Sisodia (021330624099), YashPokharna (021330124031)
Introduction :
The questions are designed to assess an individual’s past financial behavior and knowledge to understand how well they managed their finances before gaining formal financial literacy. This context helps in identifying areas where they felt confident or lacked understanding, which is crucial for developing targeted financial education programs.
Objective :
To understand the issue where financial literacy is lacking and be able to develop financial education programs.
Literature Review :
The seminal work on the impact of financial education :
The 2001 study by Bernheim, Garrett, and Maki found that middle-aged individuals who took a personal financial management course in high school saved a higher proportion of their incomes compared to those who did not. This research used data from a Merrill Lynch survey and historical education records. However, many respondents had difficulty recalling whether they had taken such a course, making it challenging to determine the true impact of financial education on their later saving behaviors.
Financial literacy of high school student :
From 1997 to 2006, five extensive, biennial national surveys of high school seniors were conducted to gauge the level of financial literacy among young American adults. The findings indicate a poor degree of capacity. The exam’s low baseline results have gotten worse, with scores on the 31 questions currently averaging slightly over 50%. Students from households with larger financial means tend to be much more financially literate than those from families that are less well-off. Hence, aggravating the inequality of economic prosperity among families.
Data Collection :
For the above problem, following are 5 questions which were framed to be
answered on Likert scale with 1 to 5 points. 100 students from ITM Business
School – MBA College in Kharghar were surveyed & for each question which
was coded as 1 to 5, mean, standard deviation, standard error and t-
stat was calculated.
Questions :
Q1. I felt confident managing my personal finances.
Q2. I had experience creating a financial plan.
Q3. I used to track my expenses regularly.
Q4. I researched before making major financial decisions.
Q5. I was aware risk associated with credits and loan.
All questions are based on the Likert scale:
• Strongly Disagree – 1
• Disagree – 2
• Neutral – 3
• Agree – 4
• Strongly Agree – 5
Data Analysis :
|
Response No. |
Q1 |
Q2 |
Q3 |
Q4 |
Q5 |
|
Mean |
3.52 |
3.33 |
3.51 |
3.7 |
3.55 |
|
Standard Deviation |
1.1234 |
1.2065 |
1.2267 |
1.0396 |
1.1403 |
|
Standard Error |
0.1123
|
0.1206 |
0.1226 |
0.1039 |
0.114 |
|
T-State |
4.6288 |
2.735 |
4.157 |
6.733 |
4.824 |
|
Results |
Strongly Agree |
Agree |
Strongly Agree |
Strongly Agree |
Strongly Agree |
Conclusion:
- Students felt confident managing their personal finances .
- Students have experience creating financial plans.
- Students are able to track their expenses on regular basis.
- Students have done research before making major financial decisions.
- Students are aware of risk associated with loans.
References :
The seminal work on the impact of financial education : Retrieved from The Impact of Financial Literacy Education on Subsequent Financial Behavior by Lewis Mandell, Linda Schmid Klein :: SSRN
Financial literacy of high school student : Retrieved from Financial Literacy of High School Students | SpringerLink